REVIAS: The Beauty Salon From Hell

It was January, 2015, and had I decided to relocate from Bangkok to Japan, with no particular plan in mind. I was invited by an old friend, a university professor in Hokkaido at the time, and also a gigantic cocksucker (more on that later), to help establish a consulting practice in Hokkaido where we would help Hokkaido based companies, many of which have never stepped foot outside Japan, to expand overseas. He knew tons of them through his network, and I knew plenty of potential buyers overseas – a perfect match. Sounded promising, so there I was sitting on a plane headed to Sapporo, Hokkaido right in the heart of winter.

First things first, I needed a visa. After a month or so, it was clear to me I wouldn’t be getting one through this consulting business, which wasn’t a fully established corporate entity yet, so the next and easiest option was to get what was dubbed the ‘Investor Visa’. Start a company and employ at least 2 employees and you can apply for it, that was what I was told. Back then, money was not an issue for me. All I needed was an idea to invest in, and I needed one fast.

Enter Michi.

Michi was introduced through a friend after getting the word I was out and about desperately looking for someone to write a cheque to. A beautiful young lady, she sported a well-established reputation as an esthetician in her area along with a strong business network – a promising candidate. She had big dreams of running her own salon, and was in the process of planning to make that happen. In addition, her practice was based out of Fukuoka, the southern part of Japan, which was actually where I wanted to be. I had seen enough winters in my life and did not enjoy freezing my ass off in Hokkaido. I did not enjoy it one bit.

After multiple trips back and forth between Fukuoka and Sapporo over the course of 2 months, things were finalized and I was to fund the creation of this new beauty salon. 2 full-time employees were to be hired, Michi being one of them, as well as 2 more part-time. Being that I am certainly no beauty expert, she was to maintain full control over the management of the company. In other words, I had given her the green light to run wild as she pleased – not a great idea, considering it was my money she was working with.

First off, it is never a good idea to own 100% of something and not control it. If someone else is to manage or CEO the company, they should at least have some ownership so you know their interests are aligned with yours, the shareholder. They should also have to work for that ownership to prove their worthiness, measured by performance targets with due dates. In addition, they should also be required to invest alongside you for a portion of that ownership, so you know they at least have some skin in the game.

None of that happened but nevertheless things proceeded as planned. The company was registered under the name Re’vias – a hybrid mix of 2 french words meaning beauty and life, or some stupid shit like that. In case you’re wondering, the word has absolutely no meaning to French people.

The most important part of the plan, and as a matter of fact the most important part of any relationship, was the communication. They were to report to me weekly with fully detailed reports, and in return could manage the company effectively ‘hands off’. The business plan was milquetoast at best, and all I wanted to know was that finances were taken care of properly, aka not go bankrupt. I didn’t expect to make a good investment return on the salon operation per se, but rather was more interested in the opportunity of selling beauty products and cosmetics sometime in the future – I had plenty of ideas for that, and for those that don’t know, Fukuoka city has an incredibly strong reputation in the beauty industry. My strength is in sourcing and selling and by doing that, I could at least add some value to our brand.

For the first few months of operation, I spent very little time in Fukuoka. I had other things going on in Tokyo and Hokkaido and couldn’t always be there – perhaps an excuse, but I doubt being there would have changed the outcome. Michi took that as an opportunity to run the fucking company into the ground. Weeks would go by with me chasing them for updates, which I was brushed off casually, and by the time I realized, the company had nothing left. Zero. A big fucking zero. Essentially the company, with hardly any operational costs, went from $50,000 in the bank to zero in 3 months, and the crazy part? There was no malicious intent.

There was no employees stealing money, or any fuckery of that sort going on behind the scenes. After looking through the numbers later on, I realized that the cost of operation was costing more than they were charging clients. In other words, THE MORE CLIENTS WE HAD THE MORE MONEY WE LOST, and after doing a cute little marketing campaign, there was nothing left.

In hindsight, this was nothing more than a lesson in adversity for me – a case study on compatible personalities and who to avoid going forward. I am not here to point fingers and say I hired bad management, at the end of the day the owner needs to take full responsibility for failure. What I did note was that Michi was incredibly stone headed and close minded, and nothing you say would ever reach her. Those type of people should never ever hold managerial roles, and certainly not be made partners, else end up on the receiving end of the ‘vanishing wealth’ financial plan.

Being in a rush was one thing – one should never enter into a partnership, unquestionably, without first vetting that partner thoroughly and understanding not just their work ethics, but more importantly how they work together. That aside, your interests need to be aligned and executive level salaries should never be fixed, only performance based.

The single most important trait, perhaps the deciding factor for me in a partnership, is that the partner needs to be proactively focused on adding value to the partnership – myself included. Ideally, you have a team of people, all with different skill sets, striving to impress one another. They are constantly working and contributing to the partnership at all hours of the day, with the fear in the back of their mind they will one day no longer be needed.

A good partner will never tell you to put ‘friendship’ before work because they understand that friendships are solidified and strengthened through good performance on their end. In fact, good partners willingly step down when they realize they are not contributing, allowing the business to proceed more efficiently without them there. This is important, because bad partners use that ‘friendship’ as an excuse to tag along and not put in any work, and by the time you realize it is already too late. It is this flawed mentality that destroys partnerships, and when shit hits the fan, believe me when I tell you, the fan will spread that shit around without any reservation.

Categories

Categories

Search

About

A travelling entrepreneur documenting lessons and challenges learned on the journey. My time is split between Asia and North America, and am always on the lookout for opportunities. I offer a different perspective on business in Asia.